US mortgage rates rose sharply for a second straight week, reaching the highest level since early August while prompting steep declines in both home-purchase and refinance activity.
The contract rate on a 30-year fixed mortgage rose 16 basis points to 6.52% in the week ended Oct. 11, according to Mortgage Bankers Association data released Wednesday. In the last two weeks, the rate has climbed 38 basis points, the most for any comparable period since February 2023.
The 15-year fixed rate jumped 23 basis points, the biggest advance since May, to 5.94%.
Mortgage rates, which track US Treasury yields, have been moving up recently as reports of strong job growth and sticky inflation prompt traders to pare back bets on aggressive interest-rate cuts.
Federal Reserve officials who have spoken since those releases have supported a more gradual approach to lowering borrowing costs after September’s outsize cut.
Rising mortgage rates are dashing hopes for a swift recovery in a housing market that’s been hamstrung by a combination of high borrowing costs and asking prices.
MBA’s gauge of home purchases slid 7.2%, the most since mid-February, while the refinancing index slumped more than 26% in the largest weekly decline since March 2020.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.
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